Coal-seam gas and minerals explorers will be forced to pay all the costs for arbitration on NSW land access disputes in state government reforms that seek to deliver more power to landowners but which risk raising gas prices.

The establishment of a new, larger panel of arbitrators is also among the overhaul of land access arrangements announced by NSW Minister for Resources and Energy
Anthony Roberts
and welcomed by farming and anti-CSG groups.

Mr Roberts said the changes, which adopt all 32 recommendations from a review led by senior counsel
Bret Walker
, would address concerns about the transparency of the arbitration process, perceived conflicts of interest by arbitrators and unfair burdening of landholders with legal costs.

But they have raised worries within the mining industry that freeing landholders from any costs for arbitration will lead to arbitration being used as a tool to stall exploration work.

“We strongly oppose any proposal for explorers to pay additional legal costs, particularly at a time when the exploration sector in NSW is already under significant pressure," NSW Mining chief executive Stephen Galilee said.

He said the reforms would “come at an economic cost to the state over the longer term".

Delays in tapping CSG reserves in NSW have worsened fears of a gas shortage in the state once existing supply contracts expire in late 2016. Prices for gas are already surging, putting the fuel at risk of being priced out of the market for manufacturing and power generation even if the Renewable Energy Target is wound back.

Land access arrangements are a prerequisite for any exploration for minerals or oil and gas to take place, but landholders have no right to refuse access and have complained about their limited ability to negotiate changes to agreements that they feel they are being bullied into signing.

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Earlier this year the uncertainty around land access prompted Santos and AGL Energy to strike a deal with NSW landowner groups setting out terms to allow CSG drilling.

Lock the Gate national co-ordinator Phil Laird said the reforms were “a solid start" in restoring the balance between landholders and mining companies. He said explorers “had for too long been able to throw their weight around and drive landholders to financial and emotional ruin through the arbitration process". Mr Roberts said it was “crucial" that both sides receive a fair hearing but that protracted disputes only increase costs and erode relations between explorers and landholders.

He said the changes “make the arbitration process fairer, more efficient and more transparent for landholders, explorers and the community".

The reforms include introducing eligibility criteria for arbitrators, including minimum qualifications, public disclosure requirements for arbitrators on employment and financial dealings, and new guidance on compensation.

The new process allows an arbitrator to make a non-binding decision for both parties, which landholders and explorers can then decide if they want to challenge in the Land and Environment Court. Explorers’ costs for arbitration will be capped by an independent expert, with time frames also limited to provide certainty for landholders and explorers.

NSW Farmers president Fiona Simson said the reforms, many of which won’t be implemented until 2015, would address the “unfair playing field" that had existed for years when it came to arbitration for access to farm land for mining or gas extraction.

NSW Mining’s Mr Galilee said his sector supported the reforms to improve governance and consistency of the arbitration process, while the peak oil industry body APPEA said the overhaul of the process provided “certainty" for both the gas industry and landholders.